One of the biggest, and more controversial trends, in the global economy

STEEL ran in Zhang Cheng’s family for three generations. His grandfather mined iron ore. His father got a job in the big state-owned steel mill just outside Jinan, capital of Shandong province. His mother worked in the on-site hospital. And Mr Zhang went to the mill-run school, graduating to a job in its foundry, where, in the heat of the blast furnace, he rolled metal into thin bars for construction. But after nearly two decades in Jinan Steel, he worked his last day there this summer. In the name of “capacity reduction”—a government policy to rein in excess production of steel—the plant stopped operating in July, and Mr Zhang went on the dole.Since they worked for a state-owned company, the local government has helped him and the 20,000 others who lost jobs find new ones. But it has been a struggle for Mr Zhang, a soft-spoken man. Openings in Jinan are mainly in the service industry—as a waiter in restaurants or an attendant at a station on the new underground. He worries that he does not have what it takes. “I’ve spent my life interacting with machines, not with people,” he says.That China has persisted in cutting capacity in heavy industry, even at the cost of pushing people out of their jobs, has been one of the biggest but also more controversial trends in the global economy over the past year. It is big because of China’s sheer heft: the country produces nearly as much coal and steel as the rest of the world combined, and even more aluminium and cement. American and European companies have in the past accused China of swamping their markets with cheap metals. But more recently they have benefited as China’s efforts to curb production have fuelled a run-up in prices. But then there is the controversy: doubts about whether the capacity cuts are all they are cracked up to be.The cuts are certainly ambitious. By 2020 the government aims to reduce the country’s annual capacity for coal production by 800m tonnes, or roughly 25% of what it made last year; its steel capacity by 100m-150m tonnes, nearly 20% of its output in 2016; and its aluminium capacity by 30% in big production centres. When Mao Zedong launched his catastrophic “Great Leap Forward” in 1958, he insisted that within 15 years China would produce more steel than Britain. China’s new campaign amounts to a Great Leap Backward: it wants to eliminate steel capacity equal to 15 times that of Britain.When the government unveiled its plans last year, the natural response was scepticism. Yes, authorities had taken to talking tough: Li Keqiang, the premier, said that economic reforms would be “like taking a knife to one’s flesh”. But for years they had promised capacity cuts that never materialised. With local officials judged to a large extent on their area’s GDP growth, they had every incentive to pay lip-service to reducing capacity, while quietly allowing new investment. By the World Steel Association’s count, almost half of the steel policies announced by China from 1990 to 2016 were focused on limiting capacity. Yet China’s steel mills mushroomed and their capacity-utilisation rate fell from nearly 90% in 2006 to less than 70% a decade later.Nearly 18 months into the latest bout of capacity cuts, China has made believers of many investors and analysts. The official numbers show it to be well ahead of schedule. And for those who doubt those data, two other indicators—price and profit—show that Chinese heavy industry is much healthier than just a short while ago. Coal and steel prices have more than doubled since the start of 2016. Producers of both, in the red for much of the past half-decade, have seen their fortunes improve markedly. Their profits have surged.

Demanding questions

This, however, does not entirely settle the controversy. As in any market, commodity prices are determined by supply and demand. At the same time as China has closed steel mills and halted work at coal mines, demand for their products has strengthened, thanks to a property-market rally and the government’s sustained splurge on infrastructure. This suggests that the price rises reflect not just the elimination of unused capacity but also greater use of what had been deemed excessive. The coal industry is the best example. Last year the government ordered mines to cap their production at 276 days, trying to put a lid on supply; this year, it let them increase that to 330 days.In China this has ignited a heated debate about whether the economy is on the cusp of a new growth cycle. Proponents argue that the rebound in industrial profits has allowed companies to repair damaged balance-sheets, and that the cuts in capacity are laying the groundwork for an eventual recovery in investment in production facilities. Others counter that a slowdown in the property market, visible in recent weeks, will spell an end to the recovery in demand, and reveal that current industrial capacity remains more than sufficient. At least some of the run-up in metal prices does appear to be excessive. At a meeting in August, the China Iron and Steel Association, an industry body, accused speculators of trying to exploit uncertainty about capacity cuts.This points to a separate concern about the nature of China’s capacity cuts: low prices ought to have signalled to companies that it was time to curtail production, but it took top-down orders from the government to get them to act. Wang Tao of UBS, a bank, describes the successes to date as a testament to policy implementation: “It is difficult to say that market behaviour has really changed.” In the coal industry, officials are struggling to find the right balance, aiming to restrain prices after their initial efforts drove them up. “It’s like a car fishtailing,” says Laban Yu of Jefferies, an investment bank. After skidding a bit, a driver with some luck and skill can get his vehicle straight again.Clownish as that might sound, there is a chilling subtext for global competitors. Putting a lid on capacity ought also to put a lid on China’s exports. But another aspect of China’s campaign is to replace outdated plants with more modern ones. In the steel sector, China has already amassed some of the world’s most technologically advanced facilities. It is likely to emerge from this round of capacity cuts with even better steel mills, giving it a bigger share of the high-end market.The closure of Jinan Steel, where Mr Zhang worked, has been touted in the state press as an example of China’s seriousness in cutting capacity. It may in fact be a better example of industrial upgrading. One option the company has given laid-off workers is to move 300km (186 miles) to the east, to the city of Rizhao, where its parent group, Shandong Steel, just opened a state-of-the-art plant. The expected output of the Rizhao mill is a touch higher than the Jinan mill. Shandong Steel, in other words, appears to be replacing capacity, not cutting it. But that is cold comfort for Mr Zhang: for its new production lines, the company wants younger workers, especially those with university degrees.

North Korea commands the world’s attention, but its nuclear test shouldn’t overshadow the important developments that happened earlier this week in other parts of the world. While North Korea and the U.S. were lobbing threats at one another, China’s president was purging generals in the People’s Liberation Army, Russia’s president was warning the U.S. against providing Ukraine with weapons, and the Islamic State’s very existence was being called into question.

China: No Time for War

Let’s begin with China. One of the most frequent questions readers pose to us is why doesn’t China simply take over North Korea and install a puppet regime in Pyongyang. (A few months ago, I watched George get into a debate at Mauldin Economics’ annual Strategic Investment Conference when a similar idea was presented as a realistic possibility.) There are a number of reasons China doesn’t want to do this, but the one I want to focus on here is President Xi Jinping’s ongoing drive to ensure the loyalty of the People’s Liberation Army not just to the Communist party but to himself as well. During a major reorganization of command structure and a purging of those not loyal to Xi is not exactly an opportune time to undertake a major military operation.

The most recent high-level purge was revealed Sept. 4, when unnamed sources told Reuters that the chief of the Joint Staff Department of the PLA (equivalent to the chairman of the Joint Chiefs of Staff in the U.S.) had been detained on corruption charges. This came just a few days after other unnamed sources told Nikkei that China was on the verge of doubling the number of vice chairmen serving on the Central Military Commission, with Xi loyalists poised to fill the newly created spots.

These purges are not out of the ordinary, nor do they indicate that Xi is facing any meaningful challenge to his leadership – at least not yet. These sorts of purges have been going on for years now, and occasionally at GPF we have gone out of our way to highlight when a particularly important official gets purged or when the reorganization of the command structure goes particularly deep. It’s an issue we constantly track because, for all of China’s acronyms and bureaucratic committees, ultimate power flows from the PLA and the Communist Party. Xi’s consolidation of control means he needs the PLA not just to be the enforcement mechanism of the Party but also to be loyal to its newly proclaimed commander-in-chief.

There is nothing in this most recent purge and command organization by itself that tells us much that we don’t already know: that Xi is ensuring that he can depend on the PLA’s loyalty to his rule ahead of next month’s much-anticipated Party Congress. It is worth highlighting today, however, both because of how high Xi’s purges have reached and because it shows that Xi’s main focus right now is on civilian control of China’s military, not sending it into battle across the Yalu River.

Russia: Vague Threats

Meanwhile, Russian President Vladimir Putin had some candid remarks for the media at a press conference following the BRICS summit in China. The quotes making the headlines are the ones about North Korea: that North Korea “would rather eat grass” than give up its nuclear program and that Washington’s bellicose rhetoric could lead only to a “global catastrophe.”

Russian President Vladimir Putin (L), Chinese President Xi Jinping (C) and Indian Prime Minister Narendra Modi arrive for the Dialogue of Emerging Market and Developing Countries on the sidelines of the 2017 BRICS Summit in Xiamen, China, on Sept. 5, 2017. MARK SCHIEFELBEIN/AFP/Getty Images

Those aren’t the quotes that got our attention. The first thing that jumped out at us was the fact that South Korea’s president came out Tuesday calling for improved relations with Russia, right before the Eastern Economic Forum in Vladivostok, at which both South Korean and North Korean representatives will be present. Russia is obviously trying to complicate matters for the U.S. wherever it can.

What also caught our attention was what Putin had to say about the frozen conflict in Ukraine. We have said this before, but it’s worth repeating: Maintaining Ukraine as a buffer to Western Europe is a national security interest for Russia. The 2014 revolution deposed a pro-Russian regime, and all Russia got to show for its vast power and influence was the annexation of Crimea, a frozen conflict in Donbass, and a pro-Western government in Kiev. Now the U.S. has raised the possibility that it will provide the government in Kiev with weapons it can use to defend itself against Russia. That was what U.S. Secretary of Defense James Mattis said when he visited Ukraine earlier this month. But we also know that the U.S. special envoy to Ukraine and one of Putin’s most important aides met in Minsk on Aug. 21 and that the statements afterward were constructive if not amiable.

Putin went out of his way to make two things clear in his comments at the BRICS press conference. First, that Russia is not spoiling for a fight. Russia does not want the U.S. to supply Kiev with weapons, but even so, Russia can’t respond with force: Its military is not strong enough to take Kiev, let alone to weather a U.S. response. This is why Putin said that even if the U.S. supplies the weapons, “this decision will not fundamentally change the situation.” Russia can tolerate a pro-Western government in Kiev so long as that government isn’t also armed to the teeth by the West.

Putin also made it clear, however, that there would be other consequences, even if he was vague about what they would be. He referred to other “conflict zones” and how the situations there might become unstable should American weapons find their way to Kiev. This seems an obvious reference to the Caucasus, where we have been keeping a close eye on various anomalies ever since the U.S. passed new sanctions against Russia in August.

Islamic State: Tactical Retreat

It’s fitting that we end with the Islamic State, which may itself be nearing its end. When last we looked at the Islamic State’s tactical position in Syria and Iraq, we noted that IS had essentially decided to give up Raqqa, the capital of its self-proclaimed caliphate. In all of our analysis of IS, we have treated it as we would treat any state. Our analysis told us that the Islamic State’s core territory was the thin but heavily populated areas between Raqqa and Deir el-Zour. That IS was pulling its best fighters and much of its resources out of Raqqa was a telling sign of how much pressure the Islamic State was under. Still, IS left enough fighters in the city to keep the U.S.-backed Syrian Democratic Forces bogged down in urban warfare while it retreated deeper into the Syrian desert, greatly increasing the importance of Deir el-Zour.

On Sept. 5, however, Deir el-Zour came under attack from the Syrian army, which was supported by Russia. Syria’s official news agency reported that the Syrian army had broken the siege of Deir el-Zour and linked up with Syrian forces that had survived for three years around the city despite being surrounded by IS fighters. Breaking the siege around the military base where these Syrian army forces have been holed up does not mean Deir el-Zour is in danger of imminent collapse. The Syrian army has had to extend its supply lines deep into the Syrian desert, which makes them vulnerable to IS counterattack. Conquering Deir el-Zour will also not be easy work for the Syrian army. The city had more than 200,000 residents before the Syrian civil war began, and that means the Syrian army will face all the difficulties that urban warfare presents against a determined enemy that is beginning to look like it has its back against the wall.

In GPF’s forecast for 2017, we noted that IS would come under considerable pressure in its core territories but that we expected it would retain territorial control until at least the end of the year. The Islamic State is now facing the considerable pressure we forecast, and while our timeline still holds for now, the possibility that IS will retreat and melt away into the local population and the deserts and recast itself as a more traditional guerrilla group gets higher with every loss it takes. IS has proved time and again that it is willing to retreat and to play the long game. It is not interested in its fighters’ embracing martyrdom for the sake of martyrdom. IS wants to build a new world here, and for that, its adherents must be alive. If IS feels it can no longer hold the line, the last phase of this battle may go much more quickly than it has up until now as IS withdraws and goes back to its roots, blending back into the local surroundings and biding time for the type of power vacuum that enabled its rise in the first place.

None of these developments happen in a vacuum, of course. The prospect of defeating IS may free the U.S. up to consider other imperatives and may sour U.S.-Russia relations even more, since the fight against the Islamic State is the one place Washington and Moscow have consistently found common ground in recent months. If the U.S. decides to push the envelope in Ukraine, it may lead to problems elsewhere in the world where Russia will try to use what influence it has to keep the U.S. distracted. Whether Xi’s control over the PLA remains firm has implications for what China can do with regard to both controlling North Korea or responding to a potential U.S. military action against Pyongyang’s nuclear weapons. It’s all the more important to remember how interconnected geopolitics is when one story is attracting the lion’s share of attention at the expense of others.

CAMBRIDGE – US President Donald Trump has boasted that his policies will produce sustained 3-4% growth for many years to come. His prediction flies in the face of the judgment of many professional forecasters, including on Wall Street and at the Federal Reserve, who expect that the US will be lucky to achieve even 2% growth.

But is there any chance that Trump might be right? And if he is, to what extent will his policies be responsible, and will faster growth entail grave long-term costs to the environment and income inequality? The stock market may care only about the growth rate, but most Americans should be very concerned about how growth is achieved.

Trump’s forecast for the United States’ overall economic-growth rate is hardly wild-eyed. A steady stream of economic data suggests that the annual rate has now accelerated to 2.5%, roughly splitting the difference between Trump and the experts. Moreover, employment gains have been robust during the first six months of Trump’s presidency, with more than a million jobs created, and stocks are soaring to new highs, both of which are fueling higher consumption.

Given this performance, getting to 3% annual growth would hardly be a miracle. And achieving Trump’s target would be even more likely if his administration suddenly became more coherent (which could indeed require a miracle).

Of course, growth this year is in many ways a continuation of that achieved during Barack Obama’s presidency. Altering the course of a giant ship – in this case, the US economy – takes a long time, and even if Trump ever does manage to get some of his economic agenda through the US Congress, the growth effects are not likely to be felt until well into 2018.

To be sure, Trump has eviscerated the Environmental Protection Agency (which has helped coal mining), softened financial oversight (great for bank stocks), and has shown little interest in anti-trust enforcement (a welcome development for tech monopolies like Amazon and Google). But his main policy initiatives for corporate tax reform and infrastructure spending remain on the drawing board.

Moreover, Trump’s plans to increase protectionism and sharply reduce immigration, if realized, would both have significant adverse effects on growth (though, to be fair, the proposal to have the composition of immigration more closely match the economy’s needs is what most countries, including Canada and Australia, already do).

Perhaps the single most important decision Trump will make on the economy will be his choice of who should replace Janet Yellen as Chair of the Federal Reserve Board. In other appointments, Trump has preferred generals and businesspeople to technocrats. By and large, the most successful bankers in recent years have been exactly the types of experts Trump seems to avoid.

Whoever Trump appoints is likely to face major challenges immediately. Subdued wage growth in the face of a tightening labor market is unlikely to continue, and any big rise in wages will put strong upward pressure on prices (though this might not happen anytime soon, given the relentless downward pressure on wages coming from automation and globalization).

How the Fed handles an eventual transition to higher wage growth will be critical. If policymakers raise interest rates too briskly, the result will be recession. If they raise rates too slowly, inflation could become uncomfortably high and ingrained.

So, yes, Trump just might get his growth number, especially if he finds a way to normalize economic policymaking (which is highly uncertain for a president who seems to prefer tweet storms to patient policy analysis). But even if the US hits the 3% target, it might not be the panacea the Trump hopes it will be.

For starters, faster growth is unlikely to reverse the current trend toward inequality, and a few small, targeted presidential interventions into the actions of specific states or companies are hardly going to change that. On the contrary, there is no reason to presume that owners of capital will not continue to be the main beneficiaries. Eventually, that trend could reverse, but I wouldn’t bet on it happening just yet.

If environmental degradation and rising inequality make economic growth such a mixed blessing, is the US government wrong to focus on it so much? Not entirely. Higher growth rates are particularly good for smaller businesses and startups, which in turn are a major contributor to economic mobility.

Recent low growth rates have made potential entrepreneurs far more reluctant to move across states or to change jobs, and have reduced economic mobility in general. And if the US economy were to weaken substantially for a prolonged period, it could bring forward considerably the day when the US no longer has significant military superiority over its rivals.

Those who, like Trump, want to reduce US military involvement overseas may argue that this is nothing to worry about, but they are wrong. Still, policies that produced more broadly shared and environmentally sustainable growth would be far better than policies that perpetuate current distributional trends and exacerbate many Americans’ woes. Even if Trump hits his growth targets in 2018 and 2019 – and he just might – only the stock market may be cheering.

BETWEEN 2011 and 2014, according to the World Bank, the number of people in the world with a bank account, either directly or through a mobile-money provider, grew by no fewer than 700m. The global ranks of “unbanked” adults thinned from 2.5bn, 49% of the total, to 2bn, just 38%. Data being collected this year are likely to show further progress, with more people who used to rely on cash and informal, often expensive, means of saving, borrowing and paying for goods and services now connected to formal financial systems.This rapid advance is far from complete: 2bn is still a big number. Plenty of transactions that could take place more safely and efficiently by electronic means are still conducted in cash. Nonetheless, progress has been remarkable. It is largely the product of a technological revolution—the harnessing of digital technology, in particular mobile phones, to provide financial services in developing countries. The most celebrated example is M-PESA, a mobile-money service used by 27m Kenyans. Although only 2% of people worldwide had amobile-money account in 2014, in sub-Saharan Africa 12% did, half of whom were not customers of conventional financial institutions.In rich OECD countries, 90% of adults already had a bank account in 2011. An even bigger share do now. Clever technology is therefore unnecessary for financial inclusion, at least in this narrow sense. Yet an account only gets you so far. “Inclusion doesn’t denote engagement,” says David Brear of 11:FS, a bank-technology consultancy. “Just because you have a bank account, it doesn’t mean you know what an APR [annualised percentage rate] is.”Financial services can still be forbiddingly expensive, complicated or hard to obtain, especially for people on low or variable incomes, those with patchy credit records, immigrants and refugees. Digital technology can help. Just as it has cut the cost of serving the unbanked in emerging markets, it has made marginalised groups in developed countries cheaper to serve. And just as telecom and internet giants, rather than banks, have led the way in the poor world, financial-technology (“fintech”) startups are in the vanguard in the rich one.It is not only the poor who find money hard to manage or bureaucracy hard to crack. “In developed countries the challenge is not so much inclusion as financial health,” says Tilman Ehrbeck of Omidyar Network, a philanthropic group that invests in startups in both rich and emerging economies. According to the Centre for Financial Services Innovation (CFSI), a think-tank in Chicago, 35% of American households that struggle financially make more than $60,000 a year. Immigrants to Britain, for example, even if they have come from elsewhere in the European Union and have a job, complain that setting up a bank account can take months. Banks typically demand proofs of residence, such as utility or local-tax bills, which new arrivals do not have.The CFSI estimates that 121m American adults have either credit scores below 600 on credit agencies’ standard scale or no score at all because agencies have little information about them. For such people loans are pricey or inaccessible. Fully 91m have incomes too low, and 54m have incomes too volatile, to use mainstream financial products effectively. The Federal Deposit Insurance Corporation, a bank regulator, reckons that 16m still have no bank account at all, although the number is declining fast, and another 51m are “underbanked”—meaning that they go outside the banking system to meet their financial needs, turning to services such as cheque-cashing or payday loans.He that hath notAmericans in these overlapping categories spent $141bn on fees and interest in 2015, says the CFSI: $55bn or so went on loans lasting more than two years, including subprime car finance. Subprime credit cards are another big category, and growing fast. Poorer people are likelier than the better-off to use cash. They also spend $5bn a year on tax advisers, who prepare their returns early and advance them money in anticipation of a rebate.Banks and fintech startups backed by venture capitalists are spending oodles on bringing finance into the digital age. Until a couple of years ago, says Mr Brear, banks concentrated on cutting costs and simplifying processes. Their digital services are getting slicker, but are aimed chiefly at the broad mass of existing customers rather than poorer new ones. “If you need a lot of help, digital is leaving you behind,” Mr Brear says. (He thinks rich clients, who want personalised help for different reasons, are also missing out.)Yet digital technology is cutting the cost of serving just about everyone. Amir Hemmat of SABEResPODER (“knowledge is power”) in Los Angeles, which gives Hispanics in America information on education and health care as well as finance, says that a lack of data is a “classic excuse” for denying affordable finance to the less well-off. “I don’t buy that, in this day and age.”SABEResPODER generates “an enormous amount of data around a hard-to-reach population”, which it uses to finance its operations. Its 930,000 members are paid to complete smartphone surveys. It sells the results (with their permission) to market researchers for companies hoping to sell more to Hispanics. Clients have included Ford, MoneyGram, Nielsen, Sprint and Wells Fargo.Computer says yesPlenty of companies are working away. The CFSI’s Financial Solutions Lab, backed by JPMorgan Chase, America’s biggest bank, incubates eight to ten startups a year. Jennifer Tescher, the CFSI’s chief executive, says it runs the rule over 350 hopefuls annually. One graduate, Propel, helps recipients of food stamps, which are received via government-issued debit cards, to manage their benefits. According to Propel, 70% of cardholders have smartphones, but most check their balances by calling a hotline or (more precariously) by saving grocery receipts. The company’s app shows their balance, lists their transactions and tells them which local shops accept stamps. It recently raised $4m from investors including Omidyar, the CFSI and Andreessen Horowitz, a Silicon Valley venture-capital firm.Digital technology has made it easier to collect and sift data—and hence to find creditworthy people among those with “thin” conventional credit files, who might otherwise be denied loans. “There are a lot of 680s among those 540s,” says Arjan Schütte of Core Innovation Capital, a venture-capital fund, referring to credit scores. At the same time, algorithms, like human risk-officers, have to avoid lending to those who cannot afford to borrow. Reckless American mortgage lending not only fed the boom that preceded the financial crisis of 2007-08, but also left borrowers ruined.Douglas Merrill, a former chief information officer of Google, was prompted to start his firm, ZestFinance, by a conviction that conventional credit scoring was denying loans to people whose only failing was to have thin credit records (his wife had been among them). Its machine-learning software draws on wider, messier sources of information—eg, whether people provide the same mobile-phone number in different credit applications, or whether they are licensed professionals. A credit-card issuer using it has cut annual losses by a nine-figure sum. RentBureau, a company acquired in 2010 by Experian, a credit-scoring agency, spotted that databases on tenants included only adverse information, such as late payments. Simply noting that rent was paid on time was a straightforward way of thickening a thin credit file.Immigrants can find it hard to get a bank account at all, let alone credit. Monese, a startup in London, has built a business largely on the frustration of arrivals in Britain from other EU countries. It is not technically a bank but an “electronic money institution” which places its customers’ cash with licensed banks. In effect, however, it offers a standard online bank account, with a debit card, contactless payments and so forth, for a monthly fee, as well as remittances in ten currencies.Whereas banks insist that new customers present documents physically, Monese asks them to install its app on their smartphones, video themselves and photograph their passport or identity card. It checks identities and issues account details within 90 seconds or so. According to Norris Koppel, the firm’s chief executive, Monese’s software-based verification procedures are more accurate than those of banks, which rely on visual checks of passports and utility bills by branch staff. The two-year-old company has nearly 100,000 active account-holders, mostly other Europeans in Britain. Recently it opened up across the euro area too.If Europeans free to roam across the single market find banking systems hard to unlock, asylum-seekers and refugees face an even more daunting task. They have little money and may lack documents that banks, wary of know-your-customer and anti-money-laundering rules, will accept. At the same time, easier access to banking should help refugees and hosts alike. “Today’s refugee is tomorrow’s citizen,” says Balazs Nemethi of Taqanu, a startup.One promising idea is to apply looser identity rules to refugees, in exchange for limited banking facilities—for example, with caps on the amount they can have in an account or on transfers of money. BaFin, Germany’s banking regulator, relaxed the terms in 2015, reasoning that it was easier to keep an eye on formal financial services than on informal ones. Taqanu is working on ways to establish identity using people’s digital footprints, such as the location of their mobile phones or their use of social media, to complement often-patchy formal documentation.MONI, a Finnish startup, has already provided services to refugees. It offers blockchain-based accounts (launched across Europe this week) which, like those of Monese, can be set up in seconds. They can be topped up from a normal bank account or a credit card. Their facility for instant payments and transfers is handy for lending or giving money to friends and relatives on a tight budget, as well as for settling bills. In 2015 the Finnish government asked MONI to supply accounts and debit cards to refugees, to whom it gives a monthly allowance and a temporary identification card, in a pilot programme.Antti Pennanen, MONI’s boss, says that around 4,000 refugees in Finland still have active accounts. Their usage has grown now that many more refugees have jobs, can pay bills and so forth. Relatives can send money without needing to entrust cash to the post. MONI is working on providing automated help in dozens of languages through artificial intelligence. The scheme is due to be extended to refugees elsewhere in Europe this month.Much more could be done, and not just for new arrivals. Ms Tescher laments the slow pace of bank transfers within the United States. Real-time payments would speed up cash flows, encourage electronic payments and squeeze cheque-cashers and payday lenders. Mr Schütte says that American laws restricting the types of information used to assess creditworthiness are too tight for the digital age. He also thinks that the Community Reinvestment Act of 1977, intended to thwart discrimination against African-Americans, is out of date. It forces banks to maintain branch networks in an era when deposits and branches are increasingly poorly matched. Steven Mnuchin, the treasury secretary, is planning an overhaul. Shifting the focus from bricks and mortar to online services would be a good place to start.

We are travelers on a cosmic journey, stardust, swirling and dancing in the eddies and whirlpools of infinity. Life is eternal. We have stopped for a moment to encounter each other, to meet, to love, to share.This is a precious moment. It is a little parenthesis in eternity.